In January 2007 the Federal Aviation Administration (FAA) reported the results of its study that assigned the fiscal year 2005 costs of its Air Traffic Organization (ATO) to users. FAA used this study to support the President's proposal to replace many current excise taxes with cost-based fees for commercial aviation users and higher fuel taxes for general aviation users. The Government Accountability Office (GAO) assessed (1) the consistency of FAA's cost assignment methodology with established standards and guidance, (2) the support for selected cost assignment assumptions and methods, and (3) the impact of including budgeted capital costs in the cost baseline. GAO compared FAA's methodology to federal accounting standards and international guidance, reviewed available documents and analyses supporting FAA's assumptions and methods, and interviewed FAA officials and consultants. GAO recommends that FAA provide additional analysis and documentation of the basis on which it assigns costs to users. GAO also recommends that FAA monitor any difference between original and actual cost assignments for facilities and equipment. In commenting on a draft of this report, the Department of Transportation neither agreed nor disagreed with its findings, conclusions, or recommendations while stating that FAA's fiscal year 2006 cost allocation will address several of the issues identified in our report.--Highlights.